HR 4853 Tax Relief and Debt Expansion…Stimulus #3? Not Quite.

Let’s get a few things clear about this bill, it’s a dirty and messy deal, and it is a function of the current lame duck Congress run by Nancy Pelosi and Harry Reid (who won’t be in attendance for the signing of the extensions, they will be pouting).  Does that mean that the cut taxes while you increase spending Republicans would create a better deal in 2011?  Who knows.

The number quoted in the media is $858 billion.  That sounds like a number pretty close to TARP I and TARP II, but the majority of the money being quoted in this bill is maintaining tax rates at their current levels — this is not spending; it is a revenue reduction number.  That means they are not raising taxes, which is what would happen if this bill was not passed by the House — you keep more of your money in your paycheck.

$798 billion (93%) in the bill is the decrease in tax revenue as interpreted by the CBO from 2011-2020.  Again this means your first paycheck in January does not have a lower total on it.

Now that leaves the famous $56 billion question in unemployment extensions.  That is deficit spending if there ever was some.  This allows people on unemployment to stay on unemployment instead of taking a “productive” job.  Ladies and gentlemen, politics is in full action.  I want a bill with tax relief, not additional deficit spending.  Congrats are in order to John Boehner avoiding an unemployment extension immediately under his watch as the newest Speaker of the House.

So who voted against this dirty bill in Ohio?  Jim Jordan (citing estate tax issues) and our own Jean Schmidt from the Republican side, as well as Dems Marcia Fudge, Marcy Kaptur, and the outgoing Mary Jo Kilroy.  Which means a majority of the Ohio Democrat caucus voted for this provision, along with local rep Steve Austria, Mike Turner and incoming Speaker John “hold my feet to the fire”  Boehner.  My hats off to Steve Driehaus for caving as easily as his did voting for this “cut taxes and raise spending bill” against his party’s wishes.  If he had done that more often he may not be unemployed in January (at least unemployment benefits are available for him).

Another noteworthy vote came from Dr. No, Ron Paul, who voted for this bill.  His comments were directly related to his firm perspective to eliminate taxation completely founded a political reality that spans three decades of politics:

“Many people have urged that this tax bill be rejected and that Republicans come back in January to vote on a clean bill. Waiting until the next Congress would also mean that taxpayers would have much more of their salary withheld until any tax cuts could be made. While it is certainly possible to wait until January, we still have a Democratic Senate, and a Democratic president who would likely veto a clean tax bill. I too would prefer to see a completely clean bill, but that is not what we have been given. A vote against the bill before us today would be a vote to raise taxes on all Americans.”

Read more of Dr. Paul’s comments here.

So is it fair to assume that Jean, through her no vote, would have expected (or authored) a cleaner bill for this topic that could have passed through both sides of Congress and the President’s office in early January?  Would it have been retroactive through the beginning of the year from a tax perspective when it passed?  I think it’s great that our congress members are considering the potential cost of “additional deficit spending” as most have cited for their reasons to vote against this issue, but voting “No” today is the same as voting “Yes” to raises taxes on every constituent.  Save the spending argument for another day gang, I am highly optimistic your day for that will come all too soon.

Dan Lillback is a Cincinnati Tea Party board member.